Water governance: the crucial challenge to ensure global water sustainability

AI-generated summary

The increasing pressures from climate change, population growth, and urbanization have made water management one of the most urgent global challenges. The Bankinter Innovation Foundation’s Future Trends Forum on clean water convened experts to discuss governance, sustainable management strategies, and innovative technologies essential for securing water resources. In the fourth article of the series, Gonzalo Delacámara, Glen Daigger, and Pascual Fernández emphasize that governance failures—rather than technological or financial barriers—are the primary obstacle to achieving long-term water security. They argue that complex institutional structures, lack of adequate incentives, and poor decision-making processes hinder the wide adoption of effective water solutions.

Delacámara highlights that while technologies like water reuse and desalination are valuable, their impact is limited by inadequate governance frameworks unable to handle 21st-century challenges. Daigger focuses on the social dynamics of change, stressing the need for a critical mass of stakeholders to adopt new practices and overcome social barriers. Fernández illustrates the fragmentation of water management in Spain, pointing to low tariffs and insufficient regulation that undermine financial sustainability. The experts advocate for transparent, inclusive governance with well-designed incentives, better coordination, and the use of digital technologies to personalize water use and improve efficiency. Ultimately, they agree that transforming water governance—integrating both social and technological innovation—is essential for building resilient water systems amidst growing environmental and societal pressures.

Gonzalo Delacámara, Glen Daigger and Pascual Fernández analyse how water governance is key to overcoming the challenges of the water crisis, highlighting the importance of transparency, appropriate incentives and technological innovations

With increasing pressure on natural resources from climate change, population growth and urbanization, water has become one of the greatest global challenges. To address this problem, the Bankinter Innovation Foundation has organised the think tank Future Trends Forum The quest for clean waters, where leading experts and leaders reflect and propose solutions on water governance, strategies for sustainable water management, and the innovations and technologies that must be involved.

In this fourth article in the series, Gonzalo Delacámara, Glen Daigger and Pascual Fernández addressed one of the most critical aspects in water management: governance. All three experts agree that governance issues, rather than financial or technological constraints, are the main obstacle to ensuring long-term water security. From institutional complexity to the lack of adequate incentives, his presentations underscore the urgent need for structural changes in the way water decisions are made globally.

If you want to see the presentations of these three experts, you can do so in these videos:

Collective governance: A shared responsibility #WaterForum

Water reuse and efficiency (i) #WaterForum

Collective governance: a shared responsibility (iii) #WaterForum

Water governance as the great unsolved challenge

Throughout this cycle of articles from the Future Trends Forum on water, experts such as David Sedlak, Yael Glazer and Carlos Duarte have exposed the technological, energy and environmental challenges facing water management. In this fourth article, Gonzalo Delacámara, Director of the Center for Water and Climate Change at IE University, points out that technological solutions, innovation and financing are not the main barriers; The real limitation lies in governance failures.

Delacámara says that while technologies such as water reuse and desalination and the application of the circular economy are extremely valuable, the reason why they are not implemented more widely is not related to a lack of resources, but to the way political and social decisions are made about water. The underlying problem, he argues, is that current institutions are not adequately prepared to manage the challenges of the 21st century.

“Transparency and accountability are necessary, but not enough. We must master complexity and uncertainty.” – Gonzalo Delacámara

The need for social change, not just technological change

Glen Daigger, Professor of Engineering Practice at the University of Michigan, for his part, stresses that the main challenge is not so much knowing what to do, but how to make change happen on a large scale. While there are cities and countries that have managed water effectively, the problem lies in the lack of widespread adoption of good practices. According to Daigger, the process of change in water governance is a social process, not a technical one, and a critical mass of actors willing to adopt new solutions is needed.

Daigger introduces the concept of the “innovation process,” a cycle that begins with innovators, those who are attracted to new ideas, and then moves on to early adopters, who seek the tangible benefits of such innovations. These early adopters are key, because once they embrace change, other actors often follow suit. However, Daigger warns that this process requires time and, above all, the removal of social barriers that hold back the adoption of new policies.

“We need to connect water management with tangible benefits for people. That’s the key to driving change.” – Glen Daigger

Transparency, incentives and coordination: pillars of a new governance

A recurring aspect in the interventions of the three experts is the need for greater transparency and better structuring of incentives in water management. Pascual Fernández, former president of the Spanish Association of Water Supply and Sanitation, stresses that, in Spain, the water sector is atomized, with more than 8,000 municipalities and more than 2,000 urban water operators. This generates inequalities in service levels and makes it difficult to finance the infrastructures necessary to maintain water quality and security.

Fernández explains that the average water rate in Spain is significantly lower than in other European countries, which generates problems in covering the real costs of operation and maintenance. This situation is not unique to Spain, but Fernández highlights the need for an independent and technical regulator that can ensure transparency and accountability, allowing water tariffs to better reflect social, environmental and economic costs and benefits.

“Urban water tariffs in Spain are, on average, less than €2 per cubic metre, compared to around €4 per cubic metre in Europe.” – Pascual Fernández

Overcoming market failures and the Jevons paradox

Delacámara introduces the concept of the “Jevons paradox,” a well-known phenomenon in economics that explains how advances in efficiency often lead to higher total resource consumption. In the water context, this occurs when modernization of irrigation systems improves water use efficiency at the plot level, but at the watershed level, total water consumption increases due to crop intensification.

This phenomenon, Delacámara points out, is a clear example of a governance failure. Although investments in efficiency are important, without complementary policies to counteract the rebound effect, the problem is not effectively solved. Delacámara argues that financial incentives for farmers, especially in overexploited watersheds, should be designed to make desalinated or recycled water a more attractive option than extracting from polluted or overexploited aquifers.

The role of digital technology in water governance

A key issue addressed by Delacámara is the potential of new digital technologies to improve water governance. The use of sensors, artificial intelligence and big data offers the possibility of collecting real-time information on water consumption, which could allow for greater personalisation of tariffs and more efficient use of resources. However, he warns that for these technologies to have a real impact, incentives and market structures need to be redesigned. Delacámaraillustrates this point with a simple example: if two citizens with very different water consumption profiles pay the same rate, there is no incentive for one to reduce their consumption or for the other to maintain their efficiency. The key, he says, is in how incentive systems are designed, and this, again, is a matter of governance.

Water governance for a resilient future

All three experts agree that while technological solutions exist and financial resources are available, the real challenge lies in how we make decisions about water. Water governance must be transparent, inclusive and based on well-designed incentives that promote efficiency and long-term sustainability.

This fourth article in The quest for clean waters series makes it clear that water governance is not a minor issue, but a crucial component of ensuring water security in a world increasingly affected by climate change and pressure on natural resources. To overcome these challenges, a change in the way we manage water will be necessary, integrating both social and technological innovation.

More articles from the series on The quest for clean waters forum: